Here's what I said:
The entire economy is not in danger
Cancel All mortgages
Thank YOU for voting NO
I'm opposed to socialism
In these four diaries, I outlined a proposal to address both the mortgage crisis and the credit crunch. But my proposal will do more than that. My proposal will reform the whole corporate system, creating a wider franchise of corporate power, instituting republican reforms of the corporate system, and laying the foundation to move forward after fixing a systemic disenfrachisement of the overwhelming majority of the population.
Few people even read the proposal. A few who did made absurd arguments against it, such as arguing that if we cancelled all mortgages, that the banks would collapse because they wouldn't have any assets to facilitate lending. Let me address that first, and again:
First, most people don't realize that the banks aren't lending real money. They are lending "promises to pay," also called commercial bank money, which the federal reserve treats as real money, but which only becomes real money, in a real sense, over time, when we pay the mortgages..
Second, if we did as I propose and cancel all mortgages, sending the property titles to all the people currently paying mortgages, two results would ensue.
One, every person currently paying a mortgage would suddenly have 100% equity, instead of debt, and the worth of that equity could only be assesed in real terms, ie, the property would be worth only what someone was willing to pay for it.
Two, every mortgage payment in the country would be in the bank as a deposit belonging to the person who would have paid the mortgage, instead of being paid out in a mortgage payment. Those deposits would be the assets that banks would use to lend, just as they do now.
Now, I propose this change in the context of putting these large corporations in receivership, disenfranchising the majority shareholders and reforming the organizational scheme of these corporations to widen the franchise of corporate power and abolish the anti-republican abuses of the corporate charter. That's a simplification of the proposal. It's actually better detailed than that.
The proper authorities to do this are the state governments, specifically the state attorney generals and state governors acting collectively as a deliberative body and employing state regulators to oversee the whole process. The proper authority to fund this effort, and to mandate checks and balances in the process itself, is the Congress.
To get back to my intro:
I warned that throwing a trillion dollars into the corporate system would not solve the problem. In fact, I warned that doing that would not prevent an economic disaster, but rather, it would facilitate an economic disaster. Read the yahoo story I linked in the intro. I told you so.
Sooner or later, the solution that I propose will become the only, and the obvious solution to the financial crisis. It's not just about mortgages. It's not gonna be "fixed" any time soon, because the root cause is not the sub-prime mortgage mess. The subprime mortgage mess is just a symptom of a deeper problem, one that's been in the making ever since Reagan was giving us his "aw shucks" foundation for fascism in the 1980s.
Housing prices are not gonna "go back up" anytime soon, and "make money for the taxpayer."
LOOK AT IT. LOOK AT THE FREAKIN PROBLEM. IT'S CALLED FASCISM.
You won't solve that problem with more fascism. You won't solve that problem by merging corporate and government power and making the federal government a "partner" in the fascist disenfranchisement and debt slavery schemes.
You need a republican solution to the concentration of power in the corporate world and the anti-republican abuses of the corporate charter.
Please look in the dictionary and understand what I mean when I say "a republican solution." Please take the time to find out that, contrary to what corporate advocates tell you on tee-vee, that corporations are NOT "the private sector." They are quasi-governmental organizations. They are chartered by the government. They are economic governing bodies and, in case you haven't noticed, they dominate our economy.
If you think I'm being really condescending about this, well I apologize. It doesn't seem like most people can decipher what is really going on because instead of thinking about what corporations really ARE, and how they derive their authority, most people just accept the "conventional wisdom" being fed to them by corporations.
Let me give you an example of the unexamined "conventional wisdom" that gets passed off on a regular basis, which is just nonsense. For the last week or so, I've heard it repeated, without examination or further analysis, that the credit crunch is "being feared" because it means that "businesses will be unable to borrow money to meet their payrolls." Come again?
Have I missed something? Since when did it become customary, or routine, or even a sound business practice to "borrow money to meet the payroll" on a regular basis?
Has anyone even thought twice about this bizarre meme being circulated without examination in the media? Who is the originator of this phrase "businesses won't be able to borrow money to meet the payroll?"
I can't imagine that experts would let this one slide, since even a layman who stops to think about it for a moment will realize that borrowing money to meet a payroll increases the cost of payroll, and payroll is usually the most expensive cost in the budget.
If you really think about it, there can really only be one justification for borrowing money to meet a payroll. It means that the business is hoarding money and won't even pay their people with the money the corporation has, opting instead to borrow it and drive the business into the ground while making sure that management, and/or the shareholders walk away with the corporation's money when the business fails.
That's what I hear when I hear that businesses are "borrowing money to meet the payroll." It assumes that no profits are being made at all, and that previous profits have disappeared into a black hole, so that there is no leeway for a short term fall-off in sales.
These are corporations we're talking about. They have their charters to provide a public benefit. There's no other justification for limited liability or the capital and wealth accumulation powers that they have. These corporations are not private property. Those are OUR corporations that these thieves are driving into the ground as they prepare to make off with the wealth we all created. Corporations don't EXIST without a public grant of charter.
It's as if the corporate leadership has gone so far off the rails that they believe that corporate charters exist to establish an aristocratic ruling class. Indeed, that is the way that they have behaved for almost 25 years and that is the essence of the many little nuggets of "conventional wisdom" that they drop into their public relations messages whenever they get a chance.
The bailout will not avert the credit crisis. Suprise!
The credit crisis is what these corporate aristocrats warned would happen if we didn't give them a bailout.
It's time for a more fundamental solution.
I've proposed it. It doesn't require us to amend the constitution. It only requires us to recognize what powers we still have over the corporate system, and use them.